The Indian rupee strengthened by two paise to 60.47 against the dollar in early trade today at the Interbank Foreign Exchange market on sustained foreign funds inflow amid increased selling of the American currency by exporters and banks.

The rupee had closed 19 paise higher at 60.49 against the dollar in yesterday's trade on weakening of the US currency amid reports of Russia and Ukraine agreeing to a ceasefire and continuing rise in local equities and sustained foreign funds inflows.

Forex dealers said increased selling of the American currency by exporters and banks supported the rupee but a lower opening of the domestic equity market and dollar's rise against other currencies overseas restricted the gains.

Meanwhile, the benchmark BSE Sensex fell by 74.28 points, or 0.27 per cent, to 27,065.66 in early trade today.